The Dallas Fed's trimmed-mean PCE inflation:NIPA is out today — that's where Dallas gets its raw data — and shows nominal labor compensation rising at more or less a steady 5% annual rate for the last few months, so you can convince yourself that the economy is improving if you want, though there are other data that can give you an excuse for pessimism. That's why people love economists.

Information received since the Federal Open Market Committee met in MarchApril suggests that economic activity has continued to strengthenthe economic recovery is proceeding and that the labor market is beginning to improveimproving gradually. Growth in household spending has picked up recently Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is decliningcontinues to be weak and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level. While bank lending continues to contract, financial market conditions remainFinancial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Although the pace of economic recovery is likely to be moderate for a time Bank lending has continued to contract in recent months. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.

Prices of energy and other commodities have declined somewhat in recent months, and underlying inflation has trended lower. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.

In light of improved functioning of financial markets, the Federal Reserve has closed all but one of the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities; it closed on March 31 for loans backed by all other types of collateral.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer runlonger-run macroeconomic and financial stability, while limiting the Committee's flexibility to begin raising rates modestly.

Possibly moved phrases: the pace of economic recovery is likely to be moderate for a time